Health4Sale Part 1: North West blows HIV money on controversial private ambulance service

By Marcus Low and Anso Thom, Spotlight

The North West Department of Health blew over R100-million expressly earmarked for HIV health services on two controversial private ambulance companies, it has emerged from correspondence in Spotlight’s possession. Serious red flags are also raised by some of the invoices submitted by one of these companies.

A letter sent by KA Dibodu in May 2016 from the Head of the North West Department of Health’s office to District Chief Directors states that R36-million from the province’s Comprehensive HIV and AIDS Conditional Grant, were to be channelled to two private ambulance companies, Buthelezi EMS and High Care EMS. While the R36-million referred to in the letter relates to the 2016/2017 financial year, the National Department of Health told Spotlight that R93-million in HIV conditional grant funds was transferred to the North West in the 2017/2018 financial year for the line item in question “inter-facility transport”. This brings the total for the two years to a staggering R129-million.

By law the HIV conditional grant can only be spent on HIV-related expenses. Various experts Spotlight spoke to confirmed that inter-facility transfers fall outside the scope of the HIV conditional grant and the spending would thus be unlawful.

“The Division of Revenue Act and grant framework does not allow that a conditional grant should be used for a purpose that is not intended,” says Popo Maja, spokesperson for the National Department of Health. According to Maja the Department has requested that National Treasury investigate the matter. Maja also indicated that steps had been taken by the National Department of Health to ensure that the North West cannot use HIV conditional grant funds for inter-facility transfers in the current (2018/2019) financial year.

Almost half-a-million people (Around 482 000) in the North West are living with HIV (12.5% of the province’s population). The HIV conditional grant is meant to help the roughly 244 000 people in the province already on HIV treatment to stay healthy and on treatment and to get the 238 000 people who still need treatment onto treatment.

Invoices raise red flags

Spotlight has also seen a number of invoices submitted to the North West Department of Health by Buthelezi EMS. Most of these invoices are from Buthelezi EMS CC. But, the Companies and Intellectual Property Commission (CIPC) registration number on these invoices (2013/06/5417/07) is not that of Buthelezi EMS CC, but that of another company called Buthelezi EMS (PTY) LTD. There is a Buthelezi EMS CC registered on the CIPC database, but its registration number is completely different from that on the invoices.

Spotlight has also seen one invoice where the branding on the invoice is not Buthelezi EMS, but B EMS. There is a company called B EMS CC listed on the CIPC database, but its registration number also does not match that on any of the invoices In Spotlight’s possession. The bank account number on the B EMS invoice also differs by one digit from that on other invoices. Some ambulances in North West have been rebranded as B EMS.

The three Buthelezi companies mentioned above are only three of seven Spotlight found with names that are in some way variations of Buthelezi EMS. Mr Thapelo Samuel Buthelezi, the man behind all these companies, failed to answer a question from Spotlight on why he has registered so many companies with similar names.

One clue might be that Buthelezi EMS (PTY) LTD, the company’s whose registration number appears on the service level agreement with the North West Department of Health and the invoices, seems to have had some trouble filing its annual tax returns. According to CIPC records a process of deregistration was started in April 2017 because the company had not filed tax returns since April 2014. With only a few extraordinary exceptions, companies cannot lawfully be awarded tenders or be paid by government without tax clearance certificates. The service level agreement in question was signed in March 2016 when, according to CIPC records, the company could not have had a valid tax clearance certificate. CIPC records show that a week after deregistration was set in motion in April 2017 the company was suddenly taken out of deregistration and reinstated – we do not know whether this is because valid tax returns were finally filed or because of another reason – either way, it would not impact the lawfulness of the initial award of the tender.

CIPC records also reveal an interesting link between Buthelezi EMS and High Care EMS (PTY) LTD – the two companies who between them were awarded the entire North West inter-facility transfer tender with High Care getting Ganyesa District and Buthelezi the rest of the province. Mr Buthelezi, director of the various Buthelezi EMS companies, and Mogale Clifford Mahlo, director of High Care EMS, are listed as co-directors of companies called Vosloorus Ambulance Services CC and VAS Emergency Medical Services (both companies that have been deregistered because of annual return non-compliance).

Two investigations

In February 2018 City Press reported that North West Premier Supra Mahumapelo had authorised a forensic investigation into procurement at the provincial Department of Health. In addition to the Gupta-linked Mediosa, Mahumapelo’s spokesperson stated that Buthelezi EMS will also form part of the investigation. City Press also reported on alleged overcharging by Buthelezi EMS, something which Mr Buthelezi denies. Additional questions that Spotlight sent to Mr Buthelezi were not answered.

Meanwhile, Buthelezi EMS continues to be paid by the North West Department of Health. Invoices seen by Spotlight show figures in excess of R20 million a month. (The second article in this Health4Sale series will reveal how Buthelezi EMS appears to be overcharging the North West Department of Health and how their service allegedly falls short.)

In addition to the forensic investigation initiated by Mahumapelo, Buthelezi EMS is also being investigated by the Hawks. Spokesperson for the Hawks in the North West Captain Tlangelani Rikhotso confirmed that they were investigating the contract between Buthelezi EMS and the North West health department, but said, “we cannot divulge any more information in relation to the case”.

The North West Department of Health declined to answer any of a long list of questions sent by Spotlight stating only that: “The management of the Department has looked into all the questions posed. The Department has also considered the fact that Buthelezi EMS and a number of other contracts are a subject of investigation by the Hawks as well as a forensic (sic) initiated by the Premier’s Office. In the light of these developments, the Department feels that the investigations should carry on and a response will then be issued afterwards.” Spotlight allowed the Department additional time to reconsider this position but did not receive comment by the extended deadline.

Note: While Spotlight is published by SECTION27 and the Treatment Action Campaign, its editors have full editorial independence – independence that the editors guard jealously. Spotlight is a member of the South African Press Council.